The California Transparency In Supply Chains Act was enacted in 2010 by Arnold Schwarzenegger (the Governor of CA at the time). The act requires that large retailers provide customers with transparency about their supply chains and their efforts to eradicate human trafficking.

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Executive Summary

An estimated 21 million people – 11.4 million women and girls and 9.5 million men and
boys – are victims of forced labor around the globe.1
These victims work in virtually every
industry and across sectors, including manufacturing, agriculture, construction, entertainment
and domestic service. California, which boasts the world’s seventh-largest economy and
the country’s largest consumer base, is unique in its ability to address this issue, and as a
result, to help eradicate human trafficking and slavery worldwide.
In recent years, California consumers have demanded that producers provide greater
transparency about goods brought to market. Consumers utilize this additional information
to drive their purchasing decisions, and various indicators suggest that Californians are not
alone. A recent survey of western consumers revealed that people would be willing to pay
extra for products they could identify as being made under good working conditions.2

A recent law in California is poised to help California consumers make better and more
informed purchasing choices. The California Transparency in Supply Chains Act (Steinberg,
2010) (the “Act”3) provides consumers with critical information about the efforts that
companies are undertaking to prevent and root out human trafficking and slavery in their
product supply chains – whether here or overseas.
This Act requires large retailers and manufacturers doing business in California to disclose
on their websites their “efforts to eradicate slavery and human trafficking from [their]
direct supply chain for tangible goods offered for sale.”4

The law applies to any company doing business in California that has annual worldwide gross receipts of more than $100
million and that identifies itself as a retail seller or manufacturer on its California tax return.
Companies subject to the Act must post disclosures on their Internet websites related to five
specific areas: verification, audits, certification, internal accountability, and training.
The California Transparency in Supply Chains Act does not mandate that businesses
implement new measures to ensure that their product supply chains are free from human
trafficking and slavery. Instead, the law only requires that covered businesses make the
required disclosures – even if they do little or nothing at all to safeguard their supply
chains. Companies subject to the Act must therefore disclose particular information
within each disclosure category, and the Act offers companies discretion in how to do so.
This Resource Guide is intended to help covered companies by offering recommendations
about model disclosures and best practices for developing such disclosures. In each
disclosure category, the Guide discusses how a company can provide disclosures that
comply with the law, as well as enhance consumers’ understanding of its anti-trafficking
and anti-slavery efforts.